Foreclosures but some good signs?

The current foreclosure mess has created mayhem in the housing market. Listings are being taken off the market and many closings are being delayed and or even canceled. No one is sure what the full impact of the situation will be or when it will be rectified. Nevertheless, there could be some hope.

The Wall Street Journal quoted Adam Levitin, associate professor of law at Georgetown University, as saying there are three scenarios that could take place:

A. In the best case scenario, the issues are simply technical, the situation is resolved and the foreclosure process continues. Many believe housing won’t recover until the glut of foreclosed homes clears the market.

B. In the medium-case scenario, litigation ensues and the matter takes years to sort out. That will inflict more pain onto the already troubled housing market.

C. In the worst case, the issues become a “systemic problem” that grinds the mortgage market to a halt and title insurers refuse to insure mortgages involving existing homes.

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